For healthcare organizations, managing employee spend can be seen as a nice-to-have, rather than a necessity, since the primary mission is to provide the best patient care. But as the healthcare industry faces new, never-seen before challenges – such as increasing costs devoted to personal protection equipment (PPE) and fluctuating levels of patient and workforce demands – medical organizations are facing the reality that tracking spend data is important. They must be efficient and effective with costs to redirect funds to where it matters most.
As these pressures continue to rise, the task of improving back-office processes within AP departments can seem minor and often be deprioritized because it’s so far removed from patient care. But if you take a step back and look at it on the clinical side, big data is helping digitally unlock life-saving details about how to respond with care. And with access to so much patient health data, it begs the question: shouldn’t healthcare organizations have the same ability when it comes to their spend data to optimize cash-flow and meet demand?
There’s a lot of spend to manage!
While it may seem like a low priority, organizations that do focus on improving back-office processes and visibility within their AP departments are actually impacting the bottom line significantly, giving both doctors and staff more time back to focus on what matters most – providing exceptional patient care.
Hospital and medical facility expenses aren’t all that’s increasing. The way spend is managed is across various channels is too, in areas such as:
- Direct PO
- Indirect PO
- Indirect non-PO
- Expense reports
And we’re seeing a lot of growth in these categories that has never been seen before.
When managing invoice spend, medical facilities are encountering a variety of pain points that hinder their efficiency. Ardent Partners discovered the following specific pain points related to AP processes for hospitals, including:
- Resolving matching errors and managing exceptions
- Manual data-entry
- Routing invoices for approval
- Lack of visibility across invoice-to-pay process
- Lost or missing invoices
- Inability to accurately forecast liabilities
Does any of this sound familiar? These are some of the most pressing challenges for healthcare AP teams to solve. More importantly, many of these challenges are manifesting themselves into a slow process that’s costing hospital and medical organizations precious time and money.
As the spend landscape continues to become more complex, different forms of invoice spend become more difficult to centralize. So, how do healthcare organizations and their back-offices manage it all to keep up? It starts with automation.
Automation is key to efficiency
The key to effectively managing invoice spend is automating your AP processes. Especially since paper-based and semi-automated invoice processing and disbursements often create hidden costs that eat away at budgets, such as:
- Processing errors
- Poor cash flow visibility
- Poor spend management
- Too many exceptions
- Onerous regulatory compliance
- Risk of fraud
- Fragmented systems
In one study from the Aberdeen Group, automating invoice processing dramatically reduced the average cost from $21.20 to $4.00, as well as processing time from 14.3 days to 3.7 days. Although automation can dramatically improve time and costs associated with spend, there’s more to the AP process success.
But, automation alone isn’t the answer
In a survey conducted by Ardent Partners, AP teams were asked what the most important factors were in driving AP and the functions it can deliver on for its organization. The results are as follows:
- Reducing processing costs: 41%
- Increase invoice/payment data visibility: 40%
- Improve reporting and analytics: 28%
- Cultivate better collaboration with suppliers: 26%
- Cultivate better collaboration with procurement: 24%
While reducing process costs is top priority, the remaining factors center around gaining visibility, including deeper data and more advanced insights on invoice. With access to this data, organizations can collaborate much better internally and externally to drive efficiency. In addition, visibility into invoice data gives organizations better control and negotiating abilities. While automation provides efficiency in AP processes, visibility into invoice data is the next step towards healthcare invoice management success.
The solution for healthcare AP departments
SAP Concur solutions offer a single, connected platform that automates your invoices and integrates them with travel and expense (T&E) payments for an all-encompassing solution when it comes to managing your healthcare spend. Through capturing paper and electronic invoices, you can get insight in to all your AP spending and simplify the entire process—from purchase requests to processing and payment.
Learn how healthcare organizations can reduce the average cost of processing an invoice by more than 80% by visiting our Concur Invoice page.